Myer returns to profit growth as turnaround efforts continue

For its first half period to January 26, 2019, Australian department
store operator Myer said total sales were down 2.8 percent to 1,671.4
million Australian dollars (1,175 million dollars); while comparable store
sales declined 2.3 percent. However, Myer posted net profit of 38.4 million
Australian dollars (27 million dollars) compared to loss of 476.2 million
Australian dollars for the same period a year earlier.

Commenting on the company’s first half trading, Myer Chief Executive
Officer and Managing Director, John King, said in a statement: “This result
demonstrates the positive customer response to a number of initiatives from
our Customer First Plan, particularly during the all-important Christmas
and Myer sale periods. There is a strong focus across the entire business
on reducing costs that do not directly benefit the customer or enhance
their experience in-store or online.”

Myer initiates measures to improve sales and profitability

The company added that higher operating gross profit margin was in part
due to a renewed focus on Myer Exclusive Brands (MEBs) which grew by 3.7
percent during the half. Prior to Christmas, Myer moved several MEBs in 23
stores to enhance visibility. Myer said, operating gross profit (OGP) also
benefited from an improved change in sales mix online with an increase in
apparel sales. OGP was also impacted by the move to focus on profitability
by emphasising higher margin brands both in-store and online and removing
some less profitable brands.

During the second half, Myer added that the business will continue to
focus on the execution of our Customer First Plan including an ongoing
focus on costs, profitability and cash management. Sales are expected to be
impacted by the exit of a number of brands and the introduction of several
new brands, and there will be additional costs associated with these
initiatives.

“There is no doubt that we are on the right path with the right plan,
and the right people in place to execute it, including a strong
relationship with all of our business partners; however there remains a lot
of work to be done,” added King.

Picture:Facebook/Myer